The source declined to be identified. Official vote totals will be announced in a filing with the Securities and Exchange Commission later Wednesday.
The grant gives Musk $2.6 billion in stock options in 12 tranches that each vest as the company hits key performance milestones over 10 years. Supporters have said the plan will align Musk with shareholders and potentially greatly increase the company’s value.
Shares were recently trading up almost 4 percent.
“Investors aren’t bothered by the fact that Tesla lost more money than people thought they would, or have had continued Model 3 misses,” Loup Ventures managing partner Gene Munster told CNBC. “They see a bigger opportunity over the long-term, and that opportunity is figuring out the trifecta between energy capture, storage and use.”
Ahead of the voting, the board said the plan will likely result in increased value for shareholders even if Musk misses the targets, better ensures Musk remains at Tesla, and spurs the achievement of the Tesla Master Plan, which in turn would make Tesla one of the world’s most valuable companies.
Musk could ultimately be awarded by up to $55.8 billion in stock and awards if the Tesla’s market cap reaches $650 billion. It is currently around $52 billion.
Some large institutional shareholders supported the proposal, such as T. Rowe Price, which has a 6.4 percent stake in Tesla.
But proxy advisers Glass Lewis and Institutional Shareholder Services (ISS) recommended rejecting it, citing its high cost, potential to dilute shares, and other issues. Glass Lewis called the sheer upfront cost of the plan “staggering,” and said it has serious potential to dilute the stock.
“The absolute costs to shareholders of this grant if approved and earned are substantial, but the amount of share capital used is even more eye watering on a relative basis,” the firm said.
Institutional Shareholder Services said the plan provides “pay opportunities over the next 10 years that dwarf those of top executives at the largest and most profitable public companies.”
The firm also said that Musk can earn a lot of money under the plan even if Tesla does not achieve sustained profitability.
Musk and his brother Kimbal recused themselves from the vote. Both are Tesla board members. Musk already owns about 20 percent of Tesla shares, which ISS said was already enough of a stake to consider Musk’s interests aligned with those of shareholders.
The vote comes at a time when Tesla shares are dropping from an all-time high set in September, over concerns about the Model 3 production ramp.
–CNBC’s Lora Kolodny contributed to this article.